Iran Energy News Oil, Gas, Petrochemical and Energy Field Specialized Channel
Related Articles
On September 21, Chinese Foreign Minister Wang Yi met with Georgian Prime Minister Irakli Garibashvili in New York, during the United Nations General Assembly, and stressed the importance of the Middle Corridor (or Trans-Caspian International Transport Route, “TITR”), which runs directly through Georgia, for regional transit.
Due to the war in Ukraine, the connectivity patterns in Eurasia are changing rapidly. The Russian route that linked the European Union with China is now of limited use. This has pushed EU member states and China to seek alternative corridors. The Middle Corridor, which stretches from the Black Sea to Central Asia via the South Caucasus, is the shortest route between western China and the EU. Georgia plays a critical role in this regard, owing to its existing infrastructure and geographic location.
Recently, Georgia has taken part in numerous intergovernmental meetings aimed at boosting the corridor’s potential. The TITR’s development was the subject of a quadrilateral statement signed by Georgia, Azerbaijan, Turkey and Kazakhstan on March 31. In May 2022, together with Kazakhstan and Turkey, Georgia discussed the Middle Corridor in a meeting held in Ankara. Later that month, transit company Georgian Railway announced that it was collaborating with companies from Azerbaijan and Kazakhstan to establish a new shipping route between the Georgian port of Poti and the Romanian port of Constanta. Apart from this, the Georgian leadership has also been active with a series of visits to the Central Asian republics in recent months.
Yet, despite this promising geopolitical setting, Georgia is also notorious for its geographic impenetrability. Ravines, gorges and nearly impassable mountains have served as a reliable defense but also as a major hindrance to the country’s transit ambitions. In truth, building infrastructure that defies geography requires large investments and, most of all, knowledge and experience.
In this regard, Chinese companies are reshaping Georgia’s geography, putting Tbilisi in a better position for various Eurasian trade routes. In 2019, the Chinese company China Railway 23rd Bureau Group (China Railway) announced that it will build the new 22.7-kilometer-long Kvesheti-Kobi road in Georgia. The total cost of the project is estimated at 1.2 billion laris ($428.6 million). China Railway will build only 13 kilometers of the road, which is part of the International North-South Transport Corridor (Agenda, August 19, 2019).
The Chinese are also taking the lead in upgrading the Khulo-Zarzma road, which will represent the shortest route between the Samtskhe-Javakheti and Adjara regions. The rehabilitated section will start from Khulo and end at Zarzma village in Adigeni via the Goderdzi Pass. The upgraded road will reduce travel time from Batumi to Akhaltsikhe by 90 minutes (Bm.ge, June 10, 2020).
The modernization of the Chumateleti-Khevi section of the international E60 highway is being carried out by the Georgian branch of the China State Construction Engineering Corporation. The F1 portion of this segment crosses through the municipalities of Khashuri and Kharagauli. The road starts in the village of Khashuri in Chumateleti and ends near Khevi village in Kharagauli municipality, where it connects to the next F2 portion of the section (Eib.org, October 18, 2018).
Another big project is the construction of a 13-kilometer four-lane cement-concrete road, 27 bridges and 18 tunnels on the Ubisa-Shorapani section of E60. The lengths of these tunnels vary from 300 to 1,600 meters, and 13 of the 27 bridges are located in the direction of Tbilisi-Argveta and the other 14 in the reverse direction (Bm.ge, September 13).
Rehabilitation work has also begun on 25.5 kilometers of the Zhinvali-Barisakho-Shatili highway. This section has not been rehabilitated for 40 years, and the road is badly damaged, which has hindered transit (Procurement.gov.ge, May 18, 2017).
Furthermore, the Bakurtsikhe-Tsnori Bypass project envisages the construction of a 16.6-kilometer-long two-lane asphalt-concrete paved road, six bridges and two traffic junctions (overpasses). The bypass road will be part of one of the main roads in Kakheti region (Tbilisi-Bakurtsikhe-Lagodekhi), which passes through a densely populated area and is characterized by a high intensity of transit traffic.
Thus, it is becoming quite clear that Chinese companies are dramatically reshaping Georgia’s landscape. Funding for these projects mostly comes from international donors, but many Chinese companies directly involved in the projects have raised some questions. This domination of Chinese companies in Georgia’s infrastructure market has caused indignation among some EU member states’ ambassadors in Georgia, as well as among Georgian construction companies (Radio Tavisupleba, December 6, 2020; Bm.ge, December 11, 2020).
Yet, despite Chinese companies’ growing presence in Georgia, relations between Tbilisi and Beijing are mostly dominated by a negative geopolitical outlook. At one time, the relationship looked to be headed in a promising direction. In 2017, China and Georgia signed a free-trade agreement to remove customs barriers—a move Georgian leaders hoped would boost exports and help develop the Georgian economy (Agenda, May 17, 2017). As a result, several large-scale investment forums were held in Tbilisi for that purpose (Tbilisisrf.gov.ge, October 22, 2019).
Fostering closer ties with China was also seen as a vital component of Georgia’s quest to balance against Russia’s regional influence. Yet, those hopes have not materialized. While trade volume has steadily increased, statistics show that Georgia mostly exports raw materials to China, such as copper and various chemicals. Similarly, concerns over corrupt practices have increased, especially tied to how Chinese companies have been awarded contracts. One illustrative case concerns PowerChina subsidiary Sinohydro winning a €26.3 million ($26 million) tender for the reconstruction of a 42-kilometer section of the Khulo-Zarzma road (Cbw.ge, August 11, 2020).
Indeed, the proliferation of Chinese companies in Georgia is set to transform the country’s transit capabilities. Even so, despite multiple advantages, substantive deepening of Chinese-Georgian relations has yet to materialize. In truth, regional geopolitics remain a major obstacle. Georgia’s close ties with the West and Russia’s strong position in the South Caucasus preclude significant growth in Chinese-Georgian connections.
